EBRD expands microfinance in Azerbaijan, November 2006EBRD expands microfinance in Azerbaijan, November 2006
16 November, 2006
Loans to FINCA Azerbaijan and Rabitabank to benefit rural areas
The EBRD is expanding its support for rural areas of Azerbaijan with two loans to Rabitabank and FINCA Azerbaijan which will benefit micro, small and medium size enterprises.
The $3 million loan to local commercial bank Rabitabank for on-lending to local businesses will be the first loan under the enlarged EBRD Azerbaijan Multi-Bank Framework Financing Facility. The new extension adds $40 million to the existing $40 million facility which has been totally committed to 8 local commercial banks to further develop their micro, small and medium-size enterprise lending. Technical assistance to implement the most efficient small business lending technologies is being provided through the EBRDï¿½s Early Transition Countries (ETC) Fund.
An additional $3 million loan to the local microfinance institution FINCA Azerbaijan is provided under the EBRDï¿½s ETC Non-bank Microfinance Institutions Framework launched in 2005. The loan builds on the successful co-operation with FINCA in the Kyrgyz Republic and supports FINCAï¿½s outreach to the smallest clients in Azerbaijani regions.
Olivier Descamps, EBRD Business Group Director, said the loans will further support the development of micro and small enterprises in Azerbaijan and of the countryï¿½s banking sector. The EBRD loans will be on-lent to rural entrepreneurs and allow FINCA Azerbaijan and Rabitabank to expand their portfolio, product range and regional network.
Both loans are partially funded by the RDI Special Fund established at the EBRD as part of BPï¿½s Regional Development Initiative (RDI) Programme aimed at creating transparent and effective access to commercial finance for local businesses including small and medium size enterprises and micro enterprises. The RDI Special Fund will cover a three year programme starting in the fourth quarter of 2006 and provide loans and technical assistance to local businesses and enterprises through local commercial banks and microfinance institutions. BP and its co-venturers will contribute $5.25 million to the Special Fund, while the EBRD will co-finance operations under the Fund in an amount at least matching the contribution from BP and its co-venturers. The EBRD is supporting the RDI Programme as part of its financing of the BTC pipeline. The EBRD provided a $125 million loan from its own resources and raised another $125 million through syndication to commercial banks for the construction of the BTC oil pipeline in November 2003. The pipeline was opened in July 2006.
The EBRDï¿½s Non-bank Microfinance Institutions Framework for Early Transition Countries aims at strengthening microfinance institutions in the Bankï¿½s poorest countries of operations. Loans are provided for on-lending to the smallest borrowers across the ETC countries Armenia, Azerbaijan, Georgia, the Kyrgyz Republic, Moldova, Mongolia, Tajikistan and Uzbekistan. The facility is accompanied by a technical cooperation framework funded by donor governments.
Through its micro and small enterprises programmes the EBRD has supported over one million small enterprises throughout eastern Europe, Russia, Central Asia and the Caucasus. The EBRD has worked with 84 commercial banks and non-bank microfinance institutions to establish or expand specialised micro and small business finance units and these partner institutions have lent $10.6 billion in loans to micro and small businesses in the region. Press contact:
Axel Reiserer, Tel: +44 20 7338 7753; E-mail email@example.com